Research suggests that musical skills are associated with phonological abilities. To further investigate this association, we examined whether phonological impairments are evident in individuals with poor music abilities. Twenty individuals with congenital amusia and 20 matched controls were assessed on a pure-tone pitch discrimination task, a rhythm discrimination task, and four phonological tests. Amusic participants showed deficits in discriminating pitch and discriminating rhythmic patterns that involve a regular beat. At a group level, these individuals performed similarly to controls on all phonological tests. However, eight amusics with severe pitch impairment, as identified by the pitch discrimination task, exhibited significantly worse performance than all other participants in phonological awareness. A hierarchical regression analysis indicated that pitch discrimination thresholds predicted phonological awareness beyond that predicted by phonological short-term memory and rhythm discrimination. In contrast, our rhythm discrimination task did not predict phonological awareness beyond that predicted by pitch discrimination thresholds. These findings suggest that accurate pitch discrimination is critical for phonological processing. We propose that deficits in early-stage pitch discrimination may be associated with impaired phonological awareness and we discuss the shared role of pitch discrimination for processing music and speech.